November

6, 1991

HOUSE OF ASSEMBLY PROCEEDINGS Vol.

XLI No. 65

The House met at 2:00 p.m.

MR. SPEAKER (Lush): Order, please!

Before going to routine business, on behalf of hon. members,

I would like to extend a warm welcome from the House of Assembly today to

twenty-three Grades VII to IX students from Bethel Academy, Victoria, Carbonear,

accompanied by their teachers, Wanda Lewis and John Murray.

SOME HON. MEMBERS: Hear, hear!

Statements by Ministers

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker. Today, I am tabling

in this hon. House the 1991 Workers' Compensation Statutory Review Committee

report.

The committee was established to conduct a review of workers'

compensation in Newfoundland and Labrador, as specified under

section 114 of the

Workers' Compensation Act. The committee was asked to study and report to the

Lieutenant-Governor in Council on the financial aspects of the Commission,

rehabilitation, industrial disease, accident prevention, the appeals process,

and policy and administrative issues.

Two reports make up the committee's finding: a majority

report signed by the chairperson and one of the committee members, and a

minority report submitted by the third member. I would like, at this time, to

thank the chairperson, Mr. Clarence Randell, and the committee members, Mr.

Robert Giannou and Mr. Jim Gill, for the time and effort put into the public

hearings and discussions giving rise to the submitted reports. I also thank all

those who participated in the review process through written or oral

presentations.

No final decision on the recommendations of this review will

be made by Government at this time. Over the next six weeks to two months, the

stakeholders in the compensation system will have the opportunity to comment on

the recommendations in writing to my office. Copies of the reports will be made

available to all those who made submissions to the committee, in order that they

may be fully aware of the recommendations that Government will be considering.

Government would hope to address the concerns that arise from

this report early in the new year with a view to ensuring the long-term

viability of workers' compensation in our Province.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Fogo.

MR. WINSOR: Thank you, Mr. Speaker.

I would like to thank the Minister of Labour for providing me

with an advance copy of the report he tabled today. Obviously, the short period

of time did not allow me an opportunity to go through it. I am bit concerned

that we could not get some unanimous consent on it. We have a minority report,

and having thirty seconds or so to look through the minority report, I find it

is basically at considerable odds with the majority report. I see, if this

report is implemented, some serious repercussions for the workers in this

Province who would be injured in industrial or other accidents. The minister, in

his statement, said that people will have an opportunity to comment on it. I

hope the minister means we will have an opportunity to have input, not a

comment. A comment does not do very much with this administration, on many

occasions, if we are to take past examples. I hope people will have input and

that Government will listen to their input, not just to the recommendations of

the majority report.

Oral Questions

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, I have a question for the

Premier. By way of a

preamble, when the Minister of Finance announced and

released the White Paper on tax reform eight months ago on tomorrow, I think it

is, he is quoted as saying, at that time, `Legislation will be brought forth to

the House this fall and tax changes would take effect on January 1, 1992.' That

was the message. Eight months later, last week, on October 28, in Hansard, page

2203, the Premier said, in response to some questions I was asking, that `the

tax measures that the Government will take, will, of course, be announced in due

course, in the Budget.' Now, because of the confusion, and there is some

confusion out there, I want to ask the Premier, Has the Government now decided

to postpone tax reform until the Budget in the spring? Which story is correct?

Is it the minister's or the Premier's?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Obviously, Mr. Speaker, we would have

preferred to be able to bring forward definitive proposals in this fall sitting

but we are not yet quite ready to do that. We want to make sure that what we are

doing is obviously the best thing for the future of this Province, and we are

taking all the time that is necessary to do a thorough assessment. So it may be

that we will not be bringing definitive proposals before the House until the

Budget time; or, if we are in a position to do so fairly soon, we may well bring

in a resolution that will indicate what we intend to do in terms of general

reform and would indicate a projected implementation date. It may or may not

coincide with the Budget. I would prefer to be able to be in a position to

announce what we are proposing for consideration earlier than the Budget, so

that we could have a thoroughgoing debate on it in the House; exactly what we

will be able to do, I am unable to say with certainty at this moment.

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Thank you, Mr. Speaker. Well, finally, we have

that cleared up. There certainly was a lot of confusion, and I don't think

people understood exactly what the Premier was trying to say last week.

May I ask the Premier this: can he give us some indication as

to when he might be telling the House, and therefore, the people, what exactly

they intend to do? He has just said that he cannot tell us right now what they

intend to do. Can he tell us when he might be in a position? Will we know, say,

in the next couple of weeks, or what?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Maybe not. It will certainly be by the

time of the Budget, but I state again, I would like to try to do it before the

Budget is brought in. Now, we normally bring in the Budget the last week of

February or the first week of March - that is when we try to get the Budget in -

so it will certainly be by that time. But I would like to be able to do it

sooner rather than later so that we can provide adequate time for a full public

discussion, because the changes are fairly substantial, and would be fairly

substantial if we decide to proceed with them. I cannot be any more definitive

than that, at this stage, Mr. Speaker.

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, it is difficult for Opposition

members to do their jobs, and for the people to understand what is happening if

we cannot get any answers from the Government. I can only continue to persist in

asking supplementary questions.

Again, this is to the Premier, Mr. Speaker: he alluded, in

the earlier answer, to the possibility of a resolution. What, exactly, is he

talking about there? Is it a resolution giving the Government the power to

proceed, or something, with tax reform? I mean, what, exactly, is the Premier

talking about there? Is it a very real possibility that we might have a debate

on such a resolution during this session of the House, in the next three or four

weeks? If it is true, then, where will the extensive

debate and extensive discussion that he talked about in an

interview last week in response to questions I asked last week, where will that

take place, when will that occur?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I have difficulty

understanding the Leader of the Opposition's comment that he cannot get any

answers. I answered the questions he asked, fully and frankly. Now maybe they

are not the answers he wants, but they are, nonetheless, the real answers.

When I talk about a resolution, we do all sorts of things by

resolution; for example, when we bring in the Budget every year we pass

resolutions giving notice of changes that we are going to make in the House,

give the approval and we go ahead and implement the changes and bring in the

legislation after. This is a normal approach. We did the same thing with

amalgamation in Mount Pearl; we brought in a resolution, the House approved of

the course of action and we undertook to change the legislation to reflect that

course of action. This is a normal thing.

Now, Mr. Speaker, in terms of major fiscal changes: we can do

it at the time of the Budget; that is one way of doing it, and bring in the

resolutions, but what we are talking about here is of greater change than you

would normally do in any one Budget. The dimension of it and the possible longer

term consequences of it are more significant than you would expect the

Government to take during the course of budgetary measures to generate revenue

for the coming year, so what I have suggested is that, I would like therefore,

to be able to bring in a resolution beforehand that would set out the proposed

changes and provide for debate in the House and that, I would hope, would also

generate debate amongst the public generally.

If we can do that in two weeks, terrific, however, I do not

want to lead the House to believe that we expect to do it in two weeks, I do

not, but if we can, we will. We are working diligently on it now, and if we

decide that we are going to proceed, or we intend to bring to the House

proposals for major tax reform and change, I think the best way to do it would

probably be to bring it by way of a resolution like this. I cannot be any more

definitive than that, Mr. Speaker.

MR. SPEAKER: The hon. the Leader of the Opposition, on a

final supplementary.

MR. SIMMS: Thank you, Mr. Speaker. I am beginning to be

more suspicious now than I was when I started this series of questions right at

the beginning.

I presume the Premier is saying: there is still an option

that the Government may not proceed; they have not made a final decision, I

think that is what he is saying. I presume, that he may not proceed, but if you

do proceed there is a strong possibility that it might be by way of a resolution

in this session of the House, just to allow for some opportunity for debate.

If that is accurate, if my

interpretation is correct, may I

ask him this and would he consider this; Would he therefore consider, since the

matter does not seem to be quite as pressing as we were told it was eight months

ago, and now that eight months have passed it does not seem to be a necessity to

rush into it, would he therefore consider taking the proposals which the

Government might bring forth in conjunction with the resolution and giving it to

one of the committees of the House to give them an opportunity to see what the

public thinks, because quite frankly everybody would know that the Minister of

Finance sent out copies, they got sixty or seventy letters back or whatever it

might be from businesses and groups, but the people of the Province, who may be

most affected, have not had an adequate opportunity. Would he consider that, if

in fact, that is the direction he decides to take?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, at the outset I must confess

that I cannot accept responsibility for the suspicious nature of the Leader of

the Opposition. He has to cope with that problem himself.

Now, in terms of what the Government intends to do, we had

intended to have introduced in the House electoral change within two years. We

are not going to make it. It is going to be introduced next week or perhaps the

next week. So we do not always meet within the time frame we project the good

intentions, but nevertheless the intentions and the dedication is still there.

So we did not make it within eight months, and I regret that we did not make it,

but it is a very complex and very important matter, Mr. Speaker, and it is far

more important that we come to the House and say: I am sorry we could not make

it within our expected eight months. We are going to take a little more time to

make sure that we do it right. Well that is all that we are doing, so I cannot

understand the great concern or expressions of suspicious nature on the part of

the Leader of the Opposition. We intend to bring a proposal to the House so that

it can be fully debated in the House, and that the general public can be

adequately informed beforehand of what is proposed, because they are significant

matters, but we want to take our time to do it correctly, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Fogo.

MR. WINSOR: Thank you, Mr. Speaker.

My question is to the Minister of Labour. On October 4th the

Minister announced a major employment program for the Province. Last week we

found out that some $17 million was taken away in capital works money this year.

Can the Minister indicate just how many seasonal jobs or jobs eliminated in the

construction sector were a result of this cancellation of $17 million worth of

capital works?

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: No, Mr. Speaker, I cannot answer that

question.

MR. SPEAKER: The hon. the Member for Fogo.

MR. WINSOR: Mr. Speaker, I go to the President of

Treasury Board then since we cannot identify the number of jobs that were lost.

Will the Minister tell us now, then, how or what projects were cancelled or

refused - the President of Treasury Board, since he controls spending.

MS. VERGE: The acting President of Treasury Board.

MR. WINSOR: The acting President of Treasury Board.

MS. VERGE: Acting Works, Services and Transportation.

MR. WINSOR: Yes. I am asking the Minister: regarding the

$17 million in capital works which the Minister of Finance indicated last week

would not be spent, would the Minister tell us where the projects were cancelled

or refused and in what specific Government Departments?

MR. SPEAKER: The hon. the President of Treasury Board.

MR. BAKER: Mr. Speaker, every year, of course, as you

start your capital works programme, in some cases there are slowdowns and in

some cases more money is spent than was expected and in some cases less. This

year there were a variety of problems which I could find out and outline for the

hon. Member at some time in the near future, as soon as I get the details.

However, I can tell him that part of the reason is that it was a very bad summer

and, therefore, things could not progress as rapidly as ordinarily they would

have, and that with some projects there were specific problems. I recall one, in

particular, the Burgeo Road, where there was a problem with the quality of the

material and, therefore, we could not do as much as we had expected to do. But

had the quality been there, as was expected, that would have been done.

So there are problems like that. There was, I believe, an $8

million carryover, in that vicinity, to next spring, and these carryovers always

exist. I do not know what the hon. Member is doing. Anytime there is a large

programme like this, not always do you get it all done in the one season you

plan to get it done in, and quite often there are carryovers. There is no money

taken out of it at all. I mean, these projects will still be done.

MR. SPEAKER: The hon. the Member for Fogo.

MR. WINSOR: A final supplementary to the Premier. On

October 4 the Minister of Labour said: It is the intention of Government to

proceed immediately with these employment initiative programmes. Last week we

asked the ministers to table a list, but we did not get it. In fact, we have

only had a partial listing now from one department, despite the undertakings of

the Premier that they would do it. It has now been thirty-one days, thirty-two

days tomorrow, since the Minister announced that he was going to proceed

immediately.

Would the Premier have his ministers in the various

departments tell us what programmes have been approved and where they are, so

that the unemployed in this Province can get back into the work force?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I did not think it was thirty-one days, I

thought it was last Thursday that this was raised.

AN HON. MEMBER: It was announced on October 4.

PREMIER WELLS: Oh, it was announced on October 4. Well, I

do know there has been some considerable difficulty due to delay in meshing the

Federal programme with it. Now I know that is causing the difficulty even right

up to today, and I know that because I heard it on CBC news today. So I heard

that that was causing some difficulty even right up to today, Mr. Speaker. But I

can assure the House that there is no reluctance on the part of the Ministers to

make known to everybody the good works of this Government. We will be most

anxious to make it known as soon as they are ready to do it. I assume there is

some good reason for the delay.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Mr. Speaker, my questions are for the Minister

of Forestry and Agriculture. Why did the Government close the Western Swine

Breeding Station this summer when the Hulan task force on Agri-Foods, which this

Administration appointed, praised the achievements of the Western Swine Breeding

Station, and specifically recommended that the Government continue to operate

it? Would the Minister explain to the House why his Government did the exact

opposite of what the Hulan task force recommended?

MR. SPEAKER: The hon. the Minister of Forestry and

Agriculture.

MR. FLIGHT: Thank you, Mr. Speaker. I thank the hon.

Member for her question. As she well knows, as is the case with all task force

reports - and this particular Member would know better than most Members - that

there was no obligation by Government to implement any recommendation, although

there is no doubt that the Hulan task force will provide us with the information

and advice we need to plan agriculture in the coming years.

The fact of the matter is that that particular decision was a

budgetary decision. It was made prior to receiving the Hulan task force report.

As I indicated to the hon. Member, as she would well know, that most task force

reports or recommendations of various task force reports did not get very much

attention prior to April of 1989.

MR. SPEAKER: A supplementary, the hon. the Member for

Humber East.

MS. VERGE: Thank you, Mr. Speaker. The Minister did not

answer my question. The question was: why did the Government close the Western

Swine Breeding Station? Granted the Government is not obligated to follow

recommendations of experts they appoint to give them advice. It is a fact that

this administration appointed the Hulan task force, and the Hulan task force

gave the Minister and the Government their report before the March 7, 1991

Budget. Would the Minister answer my question and explain to everyone why,

despite the advice of the Hulan task force, the Government closed the Western

Swine Breeding Station?

MR. SPEAKER: The hon. the Minister of Forestry and

Agriculture.

MR. FLIGHT: Mr. Speaker, the hon. Member will know that

the Western Swine Breeding Station was established I think in the 'seventies,

when the belief was that the hog industry in Newfoundland was going to expand.

That did not happen. As the Member might also know there is not a hog producing

facility west of Lewisporte today. As a matter of fact there are only fourteen

hog producing facilities in all of Newfoundland, thirteen of which are on the

Avalon Peninsula.

So based on that fact and other facts, we have advice from

very professional people - people associated with the hog industry in the

Province, people associated with hog production outside of the Province - that

it was not in the long term better interest to maintain the West Coast Swine

Breeding Station. So as a result of that advice we moved the function to the

Central Swine Breeding Station here on the Avalon Peninsula. That was done after

the best possible advice could be sought on the contribution that that

particular facility was making to the overall hog industry in Newfoundland.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker. Would the Minister of

Forestry and Agriculture tell us whether the Government is continuing the work

of the Western Swine Breeding Station at the Central Breeding Station on

Portugal Cove Road near St. John's? Specifically, would the Minister say whether

the Breeding Station at Portugal Cove Road is doing genetic research and

producing breeding stock for export?

MR. SPEAKER: The hon. the Minister of Forestry and

Agriculture.

MR. FLIGHT: I can tell the hon. Member that whatever

functions were being carried out by the Western Swine Breeding Station in Corner

Brook are now being carried out by the Central Swine Breeding Station in

Portugal Cove so any aspect of hog production in Newfoundland that was being

carried out in the Western Swine Breeding Station, the complete function has

moved to St. John's or to Portugal Cove. Yes, the Central Swine Breeding Station

is carrying out all functions that were carried out previously by the Western

Swine Breeding Station.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Mr. Speaker, a supplementary to the Premier.

Why has the Premier acted contrary to his election campaign

promise of decentralizing the Provincial Government? Why has the Premier moved

the Western Swine Breeding Station, highly praised by the Hulan task force on

Agri-Foods, from the Humber Valley, a prime agricultural area, to St. John's?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: I really do not know what the hon. Member

is talking about. I suppose she wants to put some kind of political connotation

on the very clear and lucid answer that the Minister of Forestry and Agriculture

just gave. There are a total of fourteen producers of hogs in the Province. One

of them somewhere near Bishop's Falls, and the other thirteen on the Avalon

Peninsula. Now, maybe I am missing something but it just seems to me that logic

and good sense would dictate that you operate the swine breeding station in the

area where the swine are being raised, and rather than close the one on the

Avalon Peninsula we closed the one in the Humber Valley where there were no

swine farmers. It was clear we only need one and it was a waste of money to

maintain two with the hog industry that we have. Is she suggesting that we

should have closed the one on the Avalon Peninsula where thirteen of the swine

farmers operate of the total of fourteen and kept the one open in the Humber

Valley where there are no swine farmers and the closest one is in Bishop's

Falls? Maybe that is the kind of logic that explains the utter mess they left

this Province in.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Mr. Speaker, my question is for the Minister

of Employment and Labour Relations. I am looking at the minority report by Jim

Gill on the Worker's Compensation Review Committee representing employees. It is

entitled 'Betrayal' and inside Mr. Gill says that betrayal is what workers in

Newfoundland face if the Workers' Compensation Commission goes ahead with the

proposal to slash benefits to injured workers. Will the Minister of Employment

and Labour Relations confirm that if recommendation 33 of the review is accepted

that benefits be set at 80 per cent of net income, will the Minister of

Employment and Labour Relations confirm that if that recommendation is accepted

then the workers' compensation benefits in Newfoundland will be the lowest in

Canada?

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker, and I thank the

Member for his question. I can only reiterate, Mr. Speaker, as I indicated in

the statement today, that at this point in time I cannot present any position on

behalf of Government with respect to the report, either the majority report or

the minority report. We will allow over the next couple of months for continued

input. Government then will have to take some decisions early in the new year,

we hope, and our total motivation which we will commit ourselves to, as I

indicated in the statement, will be with a view to ensuring the long-term

viability of worker's compensation in our Province. Whatever decisions those are

we will endeavour to take them.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Mr. Speaker, my supplementary then is for the

Premier. Since the Minister of Employment and Labour Relations is unable to

comment, I will ask the Premier whether or not he can assure injured workers in

this Province that they will not have their benefits slashed? Will he as the

Premier of this Government assure injured workers that they will not be in a

position of being the lowest compensated workers in this Country? Can he give us

that assurance now regardless of what the study says?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, here is the report that the

hon. gentleman is talking about. The report was written by one member, the

labour member of the committee. I can only express my complete disappointment in

an individual who would so prejudice fair consideration of the real issues at

stake here, the protection of the long-term interest of the workers of this

Province from the utter mess that the Workers Compensation fund and structure is

in. And instead of working with the others to try and achieve that result,

writes this politically motivated and oriented approach in this way that shows

no objectivity - I can only express great disappointment that the individual did

not do the job that was asked of him, and did not work to try and find a

solution instead of taking this political approach.

Now, Mr. Speaker, the hon. the Minister gave the Government's

answer. We will take into account the whole of the report, even the report

written by this individual, who portrayed it in that theatrical way, and the

lack of substance is reflected clearly in the theatrics of the way in which it

was presented.

So, Mr. Speaker, the Government will take into account all of

it, but it will not be stampeded into betraying the interest of the workers of

this Province by taking this and by responding to this kind of an approach in

that way. We will take into account everything that is said and done, and all

further representations that we receive and will make sure that we provide for a

good sound Workers Compensation system that will protect the long-term interests

of the workers in this Province.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for St. John's East on a

supplementary.

MR. HARRIS: Thank you, Mr. Speaker.

My final supplementary is further to the Premier. He did not

give the assurance that was requested, but I want to ask him if he can confirm

or admit that the harmonization or integration of Workers Compensation programs

was one of the items on the table at the Atlantic Premiers Conference held in

Prince Edward Island? Can he tell us that that is one of the issues that was

discussed for possible integration, and what implications this has for this

report?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker, that was not discussed at

the meeting. Somebody mentioned it but it was not discussed. Somebody mentioned

a whole host of things that might be considered, but no, it was not discussed,

but I do recall hearing somebody mention it. There was also some discussion

about the level of unfunded liability in some of the provinces, including

Newfoundland. As people will see, the level of the unfunded liability that has

developed as a result of the policies implemented by the former Government here

is just horrendous to cope with at this stage, and we have a major, major

problem to deal with to prevent this fund from being bankrupt in a few years. We

will, Mr. Speaker, commit to taking whatever action is necessary to protecting

the long-term interests of the workers of this Province, but we will not commit

to an action that is ill thought out or will prejudice the future protection of

our workers.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Humber Valley.

MR. WOODFORD: Mr. Speaker, my question is to the Minister

responsible for Municipal and Provincial Affairs in regard to Bill 50, "An Act

To Facilitate The Amalgamation of Certain Municipal Authorities and Municipal

Services in Relation to The Northeast Avalon Region." Could the Minister tell

the House today if a copy of that particular Bill - Bill 50 - is now ready?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. GULLAGE: No, Mr. Speaker, the Bill is not quite

ready, but it should be ready very shortly within the next few days.

MR. SPEAKER: The hon. the Member for Humber Valley on a

supplementary.

MR. WOODFORD: A supplementary, Mr. Speaker. I wonder

could the Minister tell us if any part of that particular Bill, or if he could

tell us if he is aware of any consultations whatsoever by officials in his

department pertaining to portions of that Bill with any particular municipality

in the northeast Avalon region up to this point?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. GULLAGE: Yes, Mr. Speaker, we have transition teams

in place right now dealing with the four groupings that are being considered for

amalgamation, and those transition teams have had considerable ongoing

discussion with all of the municipalities involved on the northeast Avalon.

MR. SPEAKER: The hon. the Member for Humber Valley on a

supplementary.

MR. WOODFORD: A final supplementary, Mr. Speaker. I

wonder if the Minister could then tell me if those particular municipalities

would have copies of that particular Bill, and would the Minister now tell the

House that when the - the draft I am talking about - that when the Bill is

tabled in the House, the draft copy of the Bill, will he then refer it to the

proper Legislation Review Committee for proper hearings?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. GULLAGE: Mr. Speaker, as the Bill has not been

presented to the House yet, the municipalities of course would not have seen it

either, and as to the procedures followed in the House, that would be up to the

Government House Leader.

MR. SPEAKER: The hon. the Member for Port de Grave.

MR. EFFORD: Thank you, Mr. Speaker. Mr. Speaker, some

time last week I asked a question in the House of Assembly pertaining to the

Morgan Report and then later we had some discussion in debate in the House of

Assembly and I feel obligated to continue on with that questioning to get

clarification, so I will refer my question to the Minister of Justice, and it

deals with the Morgan Report on page 34, where it says very clearly that: today,

in the House of Assembly, to fulfil the function, requires both to the

Legislator and to the constituents, a full time occupation'.

I would ask the Minister of Justice: an MHA working in

another occupation and receiving a full time salary from the House of Assembly,

I would ask the Minister of Justice, in his opinion, would that be, either

receiving money under false pretences on a legal matter or, certainly

inappropriate to the rules and laws set down by the House of Assembly and the

Legislature of Newfoundland and Labrador?

MR. SPEAKER: The hon. the Minister of Justice.

MR. DICKS: Thank you, Mr. Speaker. I would not express an

opinion in the House or elsewhere as Minister of Justice, as to whether or not a

member, doing what the hon. member indicates, has done anything contrary to the

criminal code, especially false pretences.

It seems to me as well, that the issue is, to what is

necessary for full time services, one really that the House itself, in the

Internal Economy Commission must define.

It seems to me that if an individual is available for his

duties as and when required, as in any job, that is full time availability;

whether or not, to what extent a member can carry on other duties, whether for

remuneration or otherwise is something that this House as a body should really

consider and I think the House Internal Economy Committee as well, and I see my

learned friends on the other side are nodding in agreement with that and I

appreciate that.

Thank you, Mr. Speaker.

MR. SPEAKER: Question Period has expired.

With respect to ruling last week on questions relating to

Internal Economy, the Chair took that under advisement and since that time has

done some research on the matter. Hon. members will know, at that particular

time I said that it was not in accordance with the rules of the House to ask the

Speaker the question. The Speaker is Chairman of the Internal Economy, so all

members will understand that that is not permissable. Members wanting to know

can write the Speaker, and the Speaker, naturally, is obligated to respond.

On any particular aspect in the House, hon. members will also

know that when a matter of order arises, we go to our own Standing Orders, and

when they are silent, then we go to precedent; when we have no precedent, then

we go to Ottawa. That is precisely what I have done, I have gone to Beauchesne,

or the rules and procedures of the House of Commons. In the House of Commons,

what normally happens in this respect is that the IEC designates a particular

minister. That is the only avenue I have right now. The next time that IEC meets

we will raise this matter and give IEC the opportunity to deal with it in the

appropriate way, to designate a minister; or they might make a suggestion to the

Committee on Privileges and Elections, that they might do what is done in other

Houses. The majority of the other Houses do not allow questions to the IEC.

There are, I think, just one or two that will allow it at the discretion of the

Speaker, and there are some that follow Ottawa.

So, it is not exactly clear, but my decision is that we will

follow the Ottawa precedent, pending the decision of IEC.

Notices of Motion

MR. SPEAKER: The hon. the Minister of Education.

DR. WARREN: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Memorial

University Act."

MS. VERGE: What about the school tax?

DR. WARREN: It's coming.

MS. VERGE: When?

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Labour

Relations Act, 1977."

Answers to Questions

For which Notice has been Given

MR. SPEAKER: The hon. the Minister of Fisheries.

MR. CARTER: Mr. Speaker, I believe it was on Thursday

that the hon. the Member for Grand Bank asked me a question concerning the

status of the Belleoram fish plant. Because time did not permit him to ask a

supplementary, my answer was not as complete as I would have liked it to be. So,

today, I am tabling the answer to the question on the current status of the

Belleoram fish plant.

Private Member's Day

MR. SPEAKER: It being Private Member's Day, I call upon

the Member for Menihek to proceed with his Private Member's resolution.

The hon. the Member for Menihek.

MR. A. SNOW: Thank you, Mr. Speaker. I am pleased to have

the opportunity of presenting to the House, for consideration, this resolution,

which says:

"WHEREAS mining is the only industry in the resource sector

subject to the payroll tax;

AND

WHEREAS minerals are a non-renewable resource, and the

economies of mining communities are vulnerable to depletion of the resource;

BE IT RESOLVED that payroll tax revenues collected from

mining companies and from companies which service the mining industry be

invested in a special fund; and that expenditure from the fund be directed to

the diversification of the economies of the mining towns, and assistance to

persons affected by economic dislocation in the mining industry."

Mr. Speaker, this is something that a lot of provinces have

considered over numbers of years. Some provinces have made certain moves to have

a fund established in non-renewable resources, I understand. Other provinces

have made moves in a similar type of fund, called a diversification fund, for

industries that have been directly or negatively impacted in their particular

economies.

We are seeing, Mr. Speaker, a lot of problems and economic

dislocation in the mining industry over this past year, an industry that

produces a tremendous amount of wealth for this Province. I think the gross

provincial product is around 6.6 per cent at factor cost, about three or four

times as much as pulp and paper, and about three to four times as much as the

fishing industry, at factor cost.

Mr. Speaker, we have seen last year that over 4,000 people

were directly employed in the mining industry, itself. It is the leading

industry in this Province, an industry that is going through a lot of pains now,

and one might ask, why am I proposing another burden to be placed on the

industry? Now, Mr. Speaker, I am not proposing that we put another tax burden

upon the industry. I am asking for an allocation of a particular tax; that this

industry has been singled out in having its tax imposed upon it. I say, singled

out, because it is the only resource-based industry that has the infamous

payroll tax, the health and post-secondary education tax, imposed upon it.

Mr. Speaker, the district I represent is totally dependent on

mining - totally dependent on mining. And I suppose if you were to ask anybody

living in a district, especially people living there as long as I have been, and

involved in the community, even people on the other side of the House, who have

spent a few years in Western Labrador, they will tell you that everybody does

recognize that when you move to Labrador City there is going to come a day in

Labrador City and Wabush when those communities will not have that industry.

That is a fact of life when living, working, and raising a

family in a single non-renewable resource industry community. Yes, that is

difficult to live with, Mr. Speaker. It is difficult, knowing that somewhere

down the road that industry is going to be wiped out. The people of Western

Labrador recognize that, but yet they continue to go to work and be the best

miners in the world at what they are doing. The Iron Ore Company of Canada

probably recognized that in their wage settlements last year, the increases

offered to their employees.

But, Mr. Speaker, they recognize that they have to compete in

a global economy, and they know that there is going to come a day when the

industry will not be there for them to go to work. They do not know if a similar

type of thing will happen in their community as occurred in Gagnon, Quebec, east

of us, where the community was totally bulldozed, or if it will be like

Schefferville, Quebec, where it was partially bulldozed, or like Daniel's

Harbour, that was left, or Buchans, that doesn't have very much economic

activity there now. There is some, but they don't know what is going to happen.

They know it will not be as prosperous as it is today, albeit we are going

through several layoffs, and there is a lot of uncertainty in the area.

So, Mr. Speaker, the people in Western Labrador recognize the

fact that there is going to come a day - and I don't want you to feel that I am

being totally negative, I don't think that in my working life these mines will

be shut down, at least I hope not. But I would think that in the working life of

my children and the children of my next-door neighbour, the mines in Western

Labrador will probably be shut down; and there is going to be a tremendous

amount of trauma, hardship, incurred upon individuals and families affected. So,

Mr. Speaker, I hope that people on both sides of the House consider that. We are

not talking about something that may occur in the up and down cyclical nature of

the fishing industry. I am talking about a day coming when the mines in Labrador

are going to be shut down just the same as the mines on Bell Island, albeit they

operated for seventy-one years, I think, and produced a tremendous amount of

wealth. But Bell Island does not have the economic activity that it had during

its production years as a mining community. Neither does Buchans, Mr. Speaker,

with, I believe, around fifty years of mining activity.

AN HON. MEMBER: Non-stop production.

MR. A. SNOW: Non-stop production. They did provide a

tremendous amount of economic activity and wealth to everybody else in this

Province. It was not just for the people in Buchans. Daniel's Harbour, St.

Lawrence, we can go on and on and on naming mining communities in this Province,

Mr. Speaker, that are mining communities no more.

What I am asking is that this House consider that a specific

tax, the payroll tax, be set aside as a special fund. Some people may argue that

maybe we should not have the payroll tax there at all. Well, if it is not that

particular tax, maybe you can put it on the royalty companies or take it out of

the corporate tax, do whatever you wish. I am not suggesting that you only

consider that as the payroll tax, Mr. Speaker. What I am suggesting is if you

wish to negate that, what the members on the opposite side should do is amend my

resolution to meet the principle of the idea, if you agree with that principle,

that these people who have produced so much wealth for the rest of this Province

should have some special fund set aside for them when they are dislocated from

their jobs, and they have the trauma and the hardship of picking up their

families and moving from that community that they have lived in for a number of

years.

I do not know if many of you have gone through it, Mr.

Speaker, but I want to tell you it is very hard for people, at least for me, to

see families having to sell off their furniture and their cars just for enough

money to get out to a highway where they have a greater opportunity to seek

employment, where they have debtors chasing them because of debt burdens put on

them by housing. Mr. Speaker, to see the hardships that these people have to go

through after producing so much wealth for the rest of the people of this

Province and then to see the Government of this Province turn its back on them

in their time of need, it is wrong, it is fundamentally wrong.

Now, Mr. Speaker, we have, one could argue, two problems

occurring in Western Labrador. There are two mines operating and there are two

completely different problems, I believe, in the restructuring of the mining

operations in the Iron Ore Company and the rationalization that is occurring in

Wabush. But there is one uniform problem, there are going to be fewer people

there, one common denominator, if you will, Mr. Speaker, that people are going

to be adversely affected.

I am asking that this Government help them financially by

specifically taking this amount of money that is collected from that resource

industry, the only resource industry, Mr. Speaker, and put it into as special

fund.

The Premier, in response to a question of mine a few days

ago, suggested that that tax should not be wiped out because it was miniscule,

it was small, it did not matter to the economies of the companies in their

operational feasibilities, whether or not they could compete economically. It

did not matter to them because it was miniscule in the total scheme of things, I

think were the exact words the Premier used.

Well, Mr. Speaker, if it is miniscule, if this $2.2 million

that is collected from the mining companies of Western Labrador is miniscule to

this big Government in their approach to the mining companies, should not this

Government then, be able to take this miniscule amount and put it into a special

fund for the people of the mining industry who are going to be adversely

affected?

Now, Mr. Speaker, we know that these people who are affected

have produced a tremendous amount of wealth for the rest of this Province; they

have not just worked for nine or ten weeks for three or four years; some of them

have worked as long as sixteen, seventeen and twenty years, some more than

twenty-five years, and have been thrown out of their jobs.

They are pioneers. They went to Northern Labrador, to a

desolate, cold, harsh climate, to a mining community of bunkhouses, of camps

being towed in over winter roads; they are friends of mine, some of them. They

are being thrown out of their jobs after twenty-five or thirty years of

producing wealth for the people of this Province to spend, a tremendous amount

of wealth.

I think the mining industry produces something like $130

million, annually, of direct and indirect revenues to this Province. No other

area in this Province produces as much wealth per capita as the people of

Western Labrador.

Mr. Speaker, all we are asking now is that the people in this

House reconsider the imposition of this tax, or going into the revenue of this

Province, which will be general revenue, and allocate a specific fund. You could

call it whatever you wish. The name of the fund is not that important, but what

is important to me, is that the recognition of what the people of Western

Labrador have done for this Province, not just for themselves but for all the

people of this Province that, that be recognized and this fund could be set up

to help in their dislocation.

Some people might call this a socialist solution; and I hear

some people on this side saying: `Yes, yes, right, correct,' and I hear somebody

over there saying: `Yes, it is socialist, but we are going to do it.'

MR. SIMMS: We did it as Tories.

MR. A. SNOW: We did it, Mr. Speaker. We will look after

them, somebody on the Government side said. I do not know what they are going to

look after, Mr. Speaker. What we have to do is, consider that people have to

come first, Mr. Speaker. We have to put these people who worked so hard - do not

think of them as just mining companies. These people who operate that equipment

up in Western Labrador are people, who lived in Joe Batt's Arm, Twillingate or

Millertown Junction, like myself, or Cormack, or wherever; they are from all

over this Province. They have gone there to work and they have had a reasonably

good life, but yet contributed tremendously to the Province. Economically, they

have contributed more than any other district in this Province.

Socially, they have contributed, Mr. Speaker. Some of the

finest drama presentations that have ever been produced in this Province, have

come out of Western Labrador. Athletic groups, Mr. Speaker, coming to this

Province - we have won national, provincial and international championships and

awards; we have hosted provincial, national and international sporting and

athletic events.

Mr. Speaker, we have contributed more than any other

electoral district in the Province and I think the people of this Province want

this Government to react in a favourable manner, to help the individuals who

have done so much for this Province through their participation. When these

young men and women went up North and came in over ice roads, as I suggested in

1959 and 1960, and developed the communities of Labrador City and Wabush, yes,

they had the primary purpose initially of going up to Labrador, making a quick

buck and leaving again; 99 per cent of us, that is what we had in our minds, but

what evolved, Mr. Speaker, are undoubtedly the most civic minded and responsible

people of this Province and of probably the whole Country. There is not a more

volunteer oriented community and a more forthright community in coming forward

to help one another, to help groups, whether in our community or outside, Mr.

Speaker. Western Labrador is known for its participation in being neighbourly,

if you want to call it that, or being helpful in assisting somebody not as

well-off as they are.

Mr. Speaker, I am hoping that other people will be speaking

on this resolution and that they will be in favour of it, because it is very

important at this particular time that you consider this and not only think of

what these people have produced and what they have done for this Province, and

not only because of your social conscience. Do not think of just those two

reasons, but, Mr. Speaker, think of what is occurring down the road. We are on

the eve of another development in this Province, a new industry, and that

industry is the offshore oil development. That is another industry that is a

non-renewable resource and it is very important that we approach that industry

not just from the aspect of jobs today, not just the wheelbarrow jobs or the

jobs of construction. We have to approach that industry as an industry that is

going to operate for a number of years. Also, Mr. Speaker, we have to be

cognizant of the fact that it is a non-renewable resource and the first day that

we pump one gallon of oil from those reserves it is a day closer to the demise

of those reserves, so we must prepare for the future when those reserves will

not be there, as occurred in the mining industry in Buchans. It was not

economically feasible to mine any more in Buchans so the mines were shut down.

It occurred in Daniel's Harbour and it occurred on Bell Island.

MR. FLIGHT: (Inaudible) Speaker's mike not on.

MR. A. SNOW: The hon. the Minister of Forestry and

Agriculture has suggested that a proposal similar to mine was proposed to

Government, and I assume it was proposed by the Opposition of the day.

MR. FLIGHT: (Inaudible).

MR. A. SNOW: Well, I thought he said it was the

Opposition. I am hoping he has enough clout in his Cabinet to be able to take

this, because he was in favour of it when Buchans was affected, he can take it,

argue, and articulate the position I am talking about and say that, yes, they

have earned it and we should do it. Mr. Speaker, it was good yesterday and it

will be good tomorrow. Mr. Speaker, I am hoping he is going to stand up and

support my resolution because it is very important. It is important to everybody

in this Province, as I said, especially in light of the fact that we are

approaching this new industry, the offshore oil. We have to consider that one

day, because as I said when I began this speech, one of the recognitions of

everybody in western Labrador is the fact that there is going to come a day when

there will not be a mine operating, at least the two that are there, will not be

operating in western Labrador because it will not be feasible to do. That is the

very hazard, if you will, of living in a mining community, but we must, Mr.

Speaker, set in place something such as I proposed to ensure that the economic

dislocation, the personal hardships that people affected in the industry will

not have to endure by themselves. They must have a helping hand from Government

which represents the people of this Province from all over this Province.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Finance.

DR. KITCHEN: Thank you, Mr. Speaker.

The hon. Member is beating his favourite drum, namely special

treatment for his district. He has been beating this drum, Mr. Speaker, ever

since he got in the House of Assembly. Can you imagine if every industry in this

Province wanted to set up its taxes in a separate fund for future contingencies?

Can you see the fishermen paying their taxes into a special fund? Can you see

the clergymen spending their taxes in a special fund or the teachers putting

theirs in a special fund, and coming to the logical extreme: why don't we take

each persons taxes and put it in a special fund? Then we would have no

commonweal at all. There would be no Province, everybody would be on their own

and we would just be collecting taxes from ourselves to put in a special fund.

The whole purpose of Government is for all of us to look after each other when

we are in trouble, and a special fund like the payroll tax put aside will not

help the people of Labrador if they close down, there is not enough money in it.

Now we brought in the Health and Post-Secondary Education Tax

for a special purpose, and the special purpose was to go against the cut-backs

that the Federal Government were making in their transfer payments having to do

with health and post-secondary education, and we spend more in the university

courses that we have in Labrador West and in maintaining the hospital in

Labrador West than we get from the payroll tax, and so we should. I am not

begrudging anything I am saying, but we do not want to go against this concept.

It is true that the mining industry is subject to the payroll tax, the 'whereas'

is correct. The reason we put in agriculture, fishing and forestry there was a

special reason why that formed a unit. We wanted, basically, to help out and

exempt the fishing industry in the bad times that were had last year when we

brought it in because they could not afford to pay their payroll tax, being a

very labour intensive industry, and also we had a problem with the pulp and

paper industry which at that time looked bad as well. But we were afraid that if

we gave special exemptions to a particular industry like the fishing industry

the United States Government would call countervail, and we got expert advice

from our fiscal advisors and others, lawyers and so on, in the United States and

they said the way to handle it is to define this sector in a sector. Take a

sector and define it the way the Americans define it, and they define this

sector as fishing, forestry and agriculture, primary and secondary, and that is

how agriculture, basically, got in it. That is why that exemption - not an

exemption, it was zero rated which is a little bit different from an exemption.

We decided that that year and this year it would be zero rated. What we are

going to do next year, who knows, but it is zero rated.

The other thing is that there is no connection, of course,

between the 'whereas's' and the resolution, and that is the problem that I am

having with this whole question. I know there is a problem about depletion of

mining resources and there should be some provision in the future for that

problem, I agree with you that we have a general problem there, and that problem

of mining companies winding down should be addressed, but the question is this

is not the mechanism for doing it.

I want to sort of divert my remarks in the few minutes that I

have and talk a little about taxation because there is a feeling out there that

there is a lot of taxation in this Province, and I want to correct some points.

First of all I want to say this: if you look at the general levels of taxation

in this Province you will find that our general rate of taxation at the moment -

if I could find this figure here - is about 100.3 of the national average, and

as usual I cannot find these papers. Here we are -

AN HON. MEMBER: (Inaudible) in the Atlantic Provinces.

MR. A. SNOW: Yes, at the moment the last figures we had

was about 100.3, and other provinces were higher. The Atlantic Provinces,

generally speaking, were lower. For instance, Prince Edward Island, their

average tax effort is 92.9, and Nova Scotia is 90, New Brunswick is 95, British

Columbia is 91, and Alberta is 77, but Quebec, Ontario, Manitoba and

Saskatchewan are well above the average with the tax level in Quebec being 114

whereas ours is 100. So the average tax rate in this Province is exactly on the

national average. We are not more highly taxed than any other province in

Canada. We are higher than some and lower than others, but the average is right

on the national average. So it is wrong to suggest that Newfoundlanders pay more

tax or are more highly taxed than others. Our problem is that our two most

visible taxes, namely the income tax which is 62, looks higher but is not, and

the retail sales tax at 12 per cent is the highest in Canada.

Now I want to look at business tax effort. I am going to zero

in on the mining industry later. But let's look at the business tax effort. The

business tax effort, the taxes paid by businesses in this Province, is lower

than the all-province average. Businesses now in this province, their tax effort

is 84 per cent of the national average.

Whereas in Ontario, it is 112 per cent,

and Manitoba is 110 per cent and Quebec is 109 per cent. Newfoundland is 84 per

cent. Prince Edward Island, Nova Scotia and New Brunswick are lower still. Our

business taxes in Newfoundland are amongst the lowest in Canada. Now many people

may not have believed that but it is true. Our business taxes are lowest in

Canada. Part of the reason for that is the fact that our property taxes are well

below the average in Canada.

Now I want at this stage to look now at the taxes paid by the

mining industry. I am just going to zero in a little bit and make some figures

available. Under the corporate income tax: the corporate income tax in

Newfoundland is 17 per cent for large companies. I will just say that most mines

fall in the large company bracket. In Newfoundland the corporate income tax now

is 17 per cent for large companies, that is for our Provincial.... PEI is 15 per

cent, Nova Scotia 16 per cent, New Brunswick 17 per cent; 17 per cent in

Manitoba, 15 per cent in Saskatchewan, 15.5 per cent in Alberta, and 15 per cent

in BC; Ontario, which collects its own income tax, is at the rate of 15.5 per

cent but it is not quite comparable, and for mines they give it at a lower rate

of 14.5 per cent. They can do that because they collect their own corporate

income tax directly by the province,

whereas ours is collected by the Federal

Government and we have to obey by general rules. Quebec too has a different way

of collecting corporate income tax. But by comparison our corporate income tax

is slightly higher than some provinces, but the same as New Brunswick and

Manitoba, and a point above some others. So it is not that much higher.

Now I was privileged to look at a study that was done on the

mining industry taxes by Price-Waterhouse recently. They said: let's take a

hypothetical mine that will be set up, and let's look at the taxes that

hypothetical mine might pay according to the present tax regimes. This was done

a couple of years ago. They just looked at three general taxes. The corporate

income tax that the Federal Government put on; the Provincial corporate income

tax; and the mining tax that the provinces collect. They put the three of them

together, did not consider any other taxes, just these three. Then they gave us

some figures as to who was high and who was low.

If you take all three of these taxes together the highest

mining tax in Canada is Manitoba, the highest one - Federal income tax, Manitoba

income tax, and Manitoba mining tax together are higher than any other province

in Canada. BC is next, New Brunswick is third, Ontario is fourth, Newfoundland

is fifth. So according to the Price-Waterhouse study, if you wanted to set up a

moderately sized mine in Newfoundland it would cost you around the Canadian

average. A bit lower, actually. There are certain provinces that are lower

still, like Nova Scotia, Quebec and Alberta. But basically speaking that is the

result of that study.

Now I want to look again at the mining tax and royalties,

because as you know in Newfoundland we have a mining tax. Every jurisdiction in

Canada has a mining tax. Newfoundland's mining tax works out to be about 16 per

cent for most companies, for those companies which came on deck since 1975. That

compares quite well with other jurisdictions. Except that when you look at that

mining tax alone as it applies in Newfoundland, with our configuration of mines

- because we have, as you mentioned, most of the mining activity in Labrador,

two very large mines, the amount of the mining tax itself, not the taxes paid by

mining companies, but the mining tax itself is quite high in comparison to what

other jurisdictions pay and that has to be looked at as well.

I mentioned earlier about our property taxes. Our property

taxes in Newfoundland are about 46 per cent of the Canadian average and the

mining companies pay property taxes across Canada, but in Newfoundland the

property tax on mining companies is not high compared to what it is in other

areas.

I want to talk about the payroll tax. The payroll tax that

mining companies pay in Newfoundland is 1.5 per cent on amounts over $300,000;

one and a half per cent. In Quebec, the tax is 3 per cent, plus a 15 per cent

surtax -

AN HON. MEMBER: 3.75.

DR. KITCHEN: I beg your pardon?

AN HON. MEMBER: 3.75.

DR. KITCHEN: Yes, because I am looking at ancient figures

here. That is right. 3.45 was it not? 3.45 plus a fifteen - that includes the

surtax.

In Ontario, the payroll tax starts off at ninety-eight cents,

.98 per cent for small companies and goes up to 1.95, which is higher than ours

for mining companies which are large. And in Manitoba, the payroll tax for large

companies is 2.25, so our payroll tax is lower than any other province in Canada

that has a payroll tax. It is true that the three Maritime Provinces and the

three most western provinces do not have a property tax, but most parts of

Canada do have; most of the area in Canada does have a payroll tax which is

higher than ours.

I might add too - I do not want to go into the gasoline tax,

but we have certain exemptions that mining companies can take advantage of as

well, and under our retail sales tax there are special arrangements with the two

western Labrador companies which were started up early and they benefit to a

considerable extent from the different retail sales tax, to the tune of several

hundred thousand dollars in a normal year.

And under tax reform - I am not going to announce what we are

going to do in tax reform because as has been said we have not decided yet what

we are going to do, not finally, but we are getting there. If we were to give

full business rebates, say for retail sales tax, the mining companies would gain

tremendously from that viewpoint; we have not done that, we have not decided to,

but that is another point, so there is only so much you can do with taxes to

make things better for any particular area.

Our taxes now, Mr. Speaker, on the whole in Canada, are on

the Canadian average, our business taxes are below; we are carrying out a study

as we announced in the Budget of mining taxes, and what I have to say now is not

to prejudice how that study is going to come out, but it looks very much from my

perspective that the mines in Newfoundland are treated reasonably fairly at this

point in time and hopefully they will be treated even better.

But this resolution, trying to use the tax system to address

a different problem is not the answer, that is not the answer to the problem,

and to link the

whereas's to the resolution is incorrect. I do not know what the

solution is to an industry which winds down; obviously the industry which is

winding down, whether it is the school system because of lack of pupils or the

mining industry in a particular town because of a lack of minerals or some

other; the fishing industry because of a shortage of fish, it is winding down. I

cannot really see how this can be provided for by earmarking taxes that have

been paid by that industry to take care of the problems arising in that

industry. The human problems that arise from displacement and job loss have to

be borne by the general community, and cannot be borne by that particular

industry. It does not make sense to me to link the two, but I do acknowledge

that there is a problem in mining towns.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Mr. Speaker, I rise to support the general

thrust of the motion before the House. While there may be some particular

difficulty or problems in earmarking a particular tax for a particular purpose,

I see no objection to the principle involved, quite contrary and the exact

opposite to what the Minister of Finance has just said, the principle being that

the industry which benefits from the establishment of a community to extract

minerals ought to pay the social consequences of having a short-term industry in

a single-industry town such as we have in Labrador.

Mr. Speaker, it is quite clear, as the hon. the Member for

Menihek on this side of the House has stated, that the first day that a mining

operation starts is a day closer to the closure of the operation, and in the

case of a single-industry town, to the closure of the town itself. That is the

principle, Mr. Speaker, that it appears the Minister of Finance fails to

recognize when he fails to acknowledge that there is a responsibility for the

mining company involved to have, as part of its plan, as part of its initial

proposal, a complement that ensures that by the time the ore is depleted,

whether it be five ten, or twenty years, or, in the case of Buchans, I believe

it was thirty-five years; we have had them on Bell Island for fifty or sixty

years.

AN HON. MEMBER: (Inaudible) non-stop production.

MR. HARRIS: Non-stop production, okay. But, if the

government of the day had insisted that there be a plan in place, in fifty

years, Mr. Speaker, the ASARCO Company and the mine at Buchans, by having

allocated yearly a small percentage of the profits of its operation, of the

resource taxes it would be required to pay, with all the profit it made over

those fifty years, could easily have prepared for the closure of that mine, and

either the closure of the town or the diversification of the economy, within

that period.

Now, Mr. Speaker, the Member for Menihek has made a lot of

good points about the payroll tax. I am not sure I agree with everything he said

about the payroll tax, as such. As it happens, I agree with many of the things

that the Member for Menihek says. He says, from time to time, when he gets up

making speeches in the House that he agrees with most of the policies of the

NDP, and I have to agree with him. I agree with most of them, as well. Some of

them I don't, and some of them the hon. member doesn't. But I have to say to the

hon. member that I don't agree with the policies of his party and his government

when they had opportunities, in the recent past, Mr. Speaker, to see the

problems.

Let us look back to 1982 and 1983 when there were massive

layoffs in Labrador. Now, the hon. member was not the Member for Menihek at that

time. He was trying to be, but he wasn't at that time. During that period of

time there were serious, serious problems identified in what would happen in

Labrador. I don't think they are quite over them yet. It was only in the last

year or so that the housing prices - and some of the houses that have been

closed and boarded up for many years were re-opened and sold. It is only in the

last couple of years that those problems have been resolved. So I say to the

hon. the Member for Menihek, his government, the previous government, knew from

1983 that there were serious problems in Labrador. This, Mr. Speaker, could have

been addressed then, and his government failed to address it.

So, while I agree with the sincerity of the hon. the Member

for Menihek - as did the previous Member for Menihek, he cared very deeply about

the problems of single-industry towns, and particularly Labrador West. I have to

say that the Government also, the previous government and this Government, have

had the advantage of studies done for the Royal Commission on Employment and

Unemployment, and a study, a background report, done by Wade Locke presented to

that commission as early as September, 1986, long before that day in April, 1989

when the current Government took over with the great promise on which it has

failed to deliver. Long before that, Mr. Speaker, there was a report on

single-industry towns, something that gave a lot of recommendations, twenty-five

recommendations in all, in a background report entitled: "Let's Recycle Our

Throw-away Communities and Disposable Workers: Policies for Dealing with Mining

Communities." This was done by an economist for the Royal Commission on

Employment and Unemployment.

In this report, he identifies the problem that in mining

communities, the workers are regarded as a disposable resource, that once the

profits have been made by the company, the workers who have contributed to those

profits - and yes, they have earned a living in that time, they have paid their

taxes and have worked hard for that living. And, while the shareholders of the

company put their capital elsewhere, the workers are left to relocate on their

own, or with it, what is identified in this particular paper as the main

problem, they are left with an ad hoc responsive government, something that is

cobbled together at the time, if at all, by pressures brought by people.

I remember, all of us remember, communities like Bell Island,

when the Bell Island mines shut down; when Buchans was shut down a task force

was set up, when the Americans pulled out of Argentia, another task force was

set up, but not until the people got together and forced the government to do

it. This is not the way these problems should be dealt with. They are identified

from the very beginning of the establishment of a mining community and there

must be a fund, as the resolution calls it, a "special fund", that special fund

being directed to the diversification of the economies of mining towns. What we

need is a depletion fund, one that recognizes that the mine and the resource

that is being extracted by these mining companies for industrial purposes, have

an economic life that is determined from the beginning. There should be a

depletion fund established.

The Province of Manitoba, which the Minister of Finance

referred to, established such a fund back in 1985. It was called the - I have a

note here. The Manitoba Government called it the Mining Communities Reserve

Fund. In that province, the Manitoba Government had earmarked 3 per cent. Three

per cent of the mining taxes received in a particular fiscal year were allocated

to this Mining Community Reserve Fund. That is what it was called. This fund was

used for the same purposes as are indicated by the hon. the Member for Menihek

in his resolution, to enhance the welfare and employment prospects of the mining

community residents affected by the total or partial suspension or closure of

mining operations attributable to the depletion of iron ore deposits.

That fund is a long-term fund. It is there, it is available

to government; they don't have to look at their budgets. They don't have to

look, as the Minister of Finance is looking every now and then, over his own

shoulder, to see what he is going to get from Ottawa from one day to the next.

They don't have to look to see what is in the piggy bank. What they have to do

is go to this fund established for that purpose and say, this fund is here to

help these communities, to help these people. That fund has been made available

by the companies that are profiting from the resource.

So, Mr. Speaker, there are ways of establishing, at this very

moment, now, plans for the future. The hon. the Member for Menihek has been very

forceful in this House, trying to insist that this Government take some action

in assisting the workers who are going to be affected by the current layoffs. I

commend him for it, because he is doing what the Minister of Finance criticized

him for doing, standing up for his constituents. It is sad to see - I suppose I

should give credit to the Minister of Finance, he did say, asking for special

treatment for his constituents. Well, the people of Labrador West, when they are

faced with the kinds of dislocations that are caused by massive layoffs, deserve

special treatment. They do make a special contribution to this Province. And we

ought to recognize that a mining town is a special type of community and there

ought to be special measures and a special fund established to deal with those

problems. So, I agree that there ought to be special measures, not taken because

they happen to be from Labrador West, or because the Member for Labrador West

happens to be a fine gentleman, but because the people of Labrador West deserve

to have the support of this Government in dealing with problems that result from

the kind of community they have.

I want to speak a little bit - I think I only have a few

minutes left - about the tax effort that the Minister of Finance has related to.

The Minister of Finance has talked about the tax effort throughout this country,

through various sectors, and he has made a point that our party has made for

many years, that the business community does not contribute its fair share of

taxes. The minister has identified that the business tax in this Province is at

84 per cent of the national average in terms of tax effort. That is a figure

that gives us some pause to consider that the burden of taxation is unfairly

placed on the individuals who pay their taxes.

I hope the Minister of Finance is saying that he is going to

take the burden of taxation away from the people who are dependent upon the

Minister of Social Services. Every time they spend, they are paying 7 per cent

GST with a piggyback of 12 per cent. That is close to 20 per cent in taxes that

social assistance recipients are paying every time they buy goods and services

subject to the tax. I hope the Minister of Finance is going to take that burden

away from them and place it more fairly on the people who have the ability to

pay.

I say that one figure the Minister of Finance failed to

mention in terms of tax effort, as a percentage of provincial averages across

the country, is the resource taxes. Resource taxes in this Province are at a

level of 73 per cent of the Canadian average, 73 per cent of the Canadian

average of tax effort in the resource area, and this Province is very low on

that area, as well. In the area of business taxes and resource taxes, the

taxation that this Province levies is lower than normal, so there is plenty of

room to get the mining companies and the corporations which benefit from our

Province's resources, to bear a fairer share of their taxes, and through those

taxes, have the Government allocate a portion of them, at least, to the

depletion of the resource that is being exploited by these companies.

After all, Mr. Speaker, we are talking here, of course, about

taxation, fiscal measures and all of this, but what we are really talking about

is people, the people who, from all over this Province and other parts of the

country, as well, have come to live and build their homes, and have their

families and their future, in Labrador West. They have done that. Many of them

have suffered illnesses from the industrial diseases that are part and parcel,

unfortunately, through lack of proper care, of the industrial life. Some of them

have died in the course of their employment through industrial accidents. Many

have, as I said, made their lives there.

This community may eventually be shut down, as the Prime

Minister shut down Schefferville, Mr. Speaker. Prime Minister Mulroney shut down

Schefferville in a very swift way. We may see sometime in the future, I hope we

don't, that in a community such as, say, Labrador City, when someone in board

rooms somewhere in the United States decides it is no longer profitable for them

to mine in Labrador City, they will take action to shut it down.

Well, Mr. Speaker, we want to have something set up, starting

now, to make sure that there is some morality involved in the process of mining

and what happens to people after the years of service they give to mining

communities. Not only should that be for the workers themselves, but their

families, the children who make their lives, the teachers and everybody else who

works in those communities, that they somehow or other do not have to suffer

from the dislocation associated with mining towns.

Mr. Speaker, this is a good resolution. As I said, it is easy

to criticize the resolution by finding particular loopholes in it; and the

Minister of Finance has tried to do so. But I urge all members to support this

resolution so that a start, at least, could be made on recognizing that the

people of this Province and the Government of this Province, through the House

of Assembly, support responsibility and responsible fiscal morality on the part

of mining companies when they undertake to exploit the natural resources of this

Province.

After the mine is gone, after the minerals are gone, the

people are still here, and these are they, whom we, as Members of the House of

Assembly, represent and whom I will represent when I support this resolution.

Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Minister of Mines and Energy.

DR. GIBBONS: Thank you, Mr. Speaker.

Mr. Speaker, I would like to say a few words about this

resolution. My colleague, the Minister of Finance, has addressed the specific

taxation issues and the comparisons with other jurisdictions in Canada. As he

said - and I would just as soon repeat what he said - mining companies in

Newfoundland and Labrador are fairly treated relative to other jurisdictions in

Canada.

We are approximately in the middle of the pack and not too

high or too low. And particularly relative to Labrador West, I believe we are

very fairly taxed in the mineral industry compared to the adjacent jurisdiction

across the border. I want to make one little addition to what my colleague said

on the tax of general application and how that applies.

The general application tax of 16 per cent applies to all new

mines opened since 1975. It does not apply to the mines in Labrador West, either

Iron Ore Company of Canada or Wabush mines. In both cases, they have special

agreements signed many years ago with former Governments, and in both cases,

their taxation regime is lower than the tax of general application of 16 per

cent. That 16 per cent applies, in their case, only to taxes on monies paid to

the license holder, not the particular companies that do the mining. So, their

specific agreements are the ones that apply to them, and these specific taxes

are lower than the 16 per cent tax in general.

AN HON. MEMBER: (Inaudible) license holders.

DR. GIBBONS: The license holders do pay the tax of

general application on any royalties; that would be (inaudible), in the case of

Iron Ore Company of Canada, and NALCAP, in the case of the Wabush mines

operation, but they only pay that tax on royalties that are paid to them. The

general taxes are lower than the tax of general application for the mining

companies, themselves. So, we are, I believe, very comparable to the adjacent

jurisdiction across the border in Quebec. As a matter of fact, we do have

significant advantages compared to that jurisdiction across the border.

I want to mention some other things besides taxation. My

colleague talked about the payroll tax, and my figure was 3.75 per cent since

July 1st compared to 1.5 per cent in Newfoundland and Labrador, but in the other

sectors there are big advantages in Labrador.

For example, across the border in Quebec, Wabush mines has to

pay 36 mils for its energy, 3.6 cents per kilowatt hour for its electricity. In

the Labrador West situation, the cost of the energy is only about 2.5 mils, a

major difference in energy cost in Labrador West, a big advantage.

AN HON. MEMBER: What has that to do with the price of tea

in China?

DR. GIBBONS: I am talking about things that are relevant

to these mining operations, Mr. Speaker, relevant things, and that is one where

there is a big advantage. Also, we do not have a capital tax in Labrador West

for the capital that is invested in these mining operations, major capital.

Across the border in Quebec there is a capital tax of something over half a per

cent, again an advantage on our side that is not directly a mining tax. So there

are advantages on the taxation side that are positive for the industry in our

area in Labrador West.

Now I am not going to talk anymore about the specifics of the

taxation issue, I will talk a little bit more about the other aspect of this

resolution - whether or not there should be a fund? That is not a new question -

whether or not there should be a fund? That question probably dates back as long

as there has been a mine and as long as there has been taxation by any

government.

I have been associated with our Provincial Department of

Mines and Energy since 1976, and dating back to that time there has been

discussion of mining funds. Whatever the name, whether it is a miners fund, a

depletion fund, a rehabilitation fund, a diversification fund, a community

development fund, put any name on it but there has been talk of that for years

and there has been research on that for years, and our colleague for St. John's

East, who just spoke, talked about some of the studies that have been done.

I brought with me today a copy of proceedings of a Mines

Ministers Conference in 1987, and this one has some of the history of that type

of research and discussion in it. I can make a copy available to my colleague

for Menihek. It shows some of the studies that were done, lead by the provinces,

discussions with the Federal Government, every year at the Mining Ministers

Conferences talking about this issue. Manitoba did show some leadership and they

are the ones that coordinated a lot of the studies on the pros and the cons of

community development funds. There are a lot of advantages. There could be a lot

of advantages to having such funds because you would know that amount of money

is there, but then there are the other aspects of this particular question.

This time I do not know. Frankly I do not know whether it

would be good to have a fund or not. If there is no fund, and presently we have

to accept the reality across this country that for the most part there are no

such fund anywhere - I am not sure of the exact status of the one in Manitoba

right now, but there is no such fund anywhere else, and we have to address

issues related to a closure or issues related to a cutback from general revenue

on the Government's side, and on the company's side the company must also be

there at the table to help, and we have to talk about that in this particular

case.

Now I want to come back to this particular case. We do not

have a closure. We do not have a closure, we just have a cutback, and I hope

that for the next half century there is still going to be mining in Labrador

West. There are some estimates that there is enough iron ore up there for at

least another hundred years, and I certainly hope there is, but that is not the

answer.

Bell Island still has enough iron ore for a hundred years.

The geological estimates indicate that there could be close to a billion tons of

iron ore under Conception Bay, but it is not going to be mined in the present

economic situation. It cannot be mined at a cost per ton that is comparable to

the cost per ton in Labrador West. That is part of the reason that Bell Island

closed, because Labrador West now exists, that the big open pit mines in Brazil

now exist, or that the big open pit mines in China and Australia now exist.

MR. TOBIN: What has that got to do with the resolution?

DR. GIBBONS: A lot to do with the resolution.

AN HON. MEMBER: Pay attention.

AN HON. MEMBER: That is unusual.

DR. GIBBONS: We have to look at the economics of the

situation, and it is economics that is going to determine whether or not this

mine is going to continue in the long-term. That is why we have had the cutbacks

announced recently in Labrador City and Wabush, both these companies want to

compete, both these companies want to survive for the long haul. I want them to

survive for the long haul, and I want to see the towns of Wabush and Labrador

City continue to survive for the long haul, and we have to do our part as a

Government in making sure that any cutbacks are done fairly, but the companies

and the unions involved also want to be sure that everything that is happening

between them is done on a fair basis.

Mr. Speaker, I also want to echo some of the comments from my

colleague from Menihek in introducing this resolution. The mining industry in

Newfoundland and Labrador is a leading industry. In terms of value on a factor

cost basis it is the leading industry in this Province. And Labrador West, yes,

has made a major contribution to the Province's economy. I want it to continue

to do that. In these tough times in Labrador West, my colleague, the Minister of

Employment and Labour Relations, and I are looking at the issues from the

Government perspective, and we want to make sure that we do our part to help

these employees who are affected negatively, the ones who are displaced.

We are studying the implications of cost in moving. If there

has to be a mobility grant in place, maybe it can be worked out. We are looking

at that. We are looking at what was done the last time, in 1982, when there was

a major reduction and a lot of people got laid off. So, we are studying that

part.

We are studying the aspects of training, what can be done in

the training area to ensure that people who are displaced from jobs in Labrador

West will now have something to go to. Some of them have said to me that they do

not want to go to a mining town anymore, they do not want to go to a mining job

anymore. They want something different, because they do not see any

opportunities in mining, as they look west and north at other mines in this

Country. A lot of people are worried about where they are going to go to work as

they leave Labrador City and Wabush. We want to help put some programmes in

place that will be appropriate, and I would think we can do that in consultation

with the people affected.

Let's identify the programmes that are going to be

appropriate for them. Let's hope that we, working with the Federal Government

and CEIC in getting money and programmes in place, can do things right in

Labrador City - Wabush at the community college that will help them get some of

the training there instead of having to move, because there are some advantages

to them to stay living where they are. The benefits of cheaper energy is one of

them, for example, and the fact that they do have their homes in the area and

their roots in the area, in some cases. So, we want to work with the people

affected.

Next week I plan to be in Labrador City and Wabush again, on

Tuesday and Wednesday, and at that time I would expect to sit down with both

companies and unions, again to talk about the issue as of today, where it sits

right now and what we can do.

Coming back to the specifics of the resolution, Mr. Speaker,

at this time I do not really know in my own mind whether we should have a fund.

I am not sure. Looking at the pros and the cons and looking at all the studies

that have been done in the past, I am not really sure if there should be a fund.

I think maybe that is an issue that can be looked at some more. Whether a fund

should be created by transferring payroll tax, no, I do not think we should say

it is a payroll tax that should be transferred into such a fund. If we are going

to create such a fund, I think we should look at it in a more general way and

say it is going to be a few cents per ton or a few dollars or a percentage of

the taxes that are now paid, or a supplement, an addition to the taxes that are

now paid. But I do not think we should say it is the payroll tax. That was put

in place for health and education, in particular. So I do not think we can agree

specifically on the recommendation.

In terms of the concept, I am still open on the concept and I

am still prepared to study the concept more.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Fogo.

MR. WINSOR: Thank you, Mr. Speaker.

I rise to support the motion put forward by my colleague from

Menihek. Mr. Speaker, after listening to two speakers, the Minister of Finance

and the Minister of Mines and Energy, I am not sure where the caring for people

rests with that Government. The Minister of Finance got up and tried to throw

out all kinds of figures, tax figures, tax statistics and everything else, never

once mentioning how people who are dislocated from their towns, from their jobs

and, in many cases, from their families have to suffer.

I was also intrigued because it seems to be an ongoing pet

peeve of the Minister, whenever he can get a chance, to criticize, quite often

unfairly, the people of Menihek in Labrador. The Minister of Finance made

reference to my colleague from Menihek who is always championing the cause of

the people of his district. The Minister of Finance always seem to be putting

down the people of his district. Mr. Speaker, when the payroll tax was

introduced in this Province we, as a party, were opposed to it and, Mr. Speaker,

we are still opposed to the payroll tax.

If it is to stay there, as the Premier has indicted that it

must, and is going to stay there, all we are asking is that the money paid in

the Labrador City - Wabush area be set aside for a special diversification fund

to help these people in the difficult times we are going through. The Minister

of Mines and Energy quite rightly said it is not a closure but it is a cutback.

Mr. Speaker, that gives us some lead time. The Minister of Finance said it is

only a small amount of money and it would not do very much. Mr. Speaker, if it

were collected over a long period of time it would obviously offer some

alternatives. We heard the Minister of Mines and Energy all last week lamenting

the fact that exploration in this Province has declined from, I think, $41

million to $12 million, that prospects for the future seem even glimmer and that

there is going to be even less exploration in this Province. Well, Mr. Speaker,

some of this money might be able to be used to see if we can stimulate the

mining industry, to do more, to diversify, to explore for more ore, and so on.

The Minister of Finance keeps referring to our taxes being the lowest in the

country. Every time he gets into debate he takes a great deal of time to tell us

we are not taxed very much. Mr. Speaker, I do not find very much in this

resolution and I wish the Minister had stuck to the original resolution instead

of giving us a barrage of facts, albeit some of them quite old, as he said.

SOME HON. MEMBERS: Oh, oh!

MR. WINSOR: Well, the Minister of Mines and Energy

constantly had to correct him to tell him he had wrong figures. Mr. Speaker, it

was just a litany of facts that had nothing to do with the real issue and the

real issue is that the people of Labrador City and Wabush for the next number of

years have pretty uncertain times. The payroll tax may take a couple of million

dollars a year from the mining companies. The reason those mining companies have

been in a downturn is because they have not been economically viable, so if we

are taking something from them year after year it makes it less viable. I am

sure the Member for Baie Verte - White Bay, recently elected, knows something of

the problems that a mining town now faces as a result of a mine shutdown. A

considerable number of people of the Baie Verte Peninsula as a matter of fact

have been dealt a double blow because many of them went to Hope Brook after to

work as miners and the closure of the Hope Brook mine has again put these people

out of work, so the trend continues. This resolution is only calling for

Government to set up a diversification fund to allow people who live in the

mining towns and other one industry towns like mines, and oil maybe down the

road, to have some future when the mines close down. Now, the Minister of

Finance when speaking asked, what happens when the schools lose their pupils? Do

teachers retain their jobs? Mr. Speaker, they do because of the 2 per cent

saving clause that was put in the contract of these people to give them a

measure of protection. It gives them some lead-in time. Instead of having this

massive disruption in a town or school you have some lead-in time, you have

another year and another year, to do some planning. This is not the case in a

mining town. It is not a contract like that at all. If the mine is closed, and

as we saw in the interviews on television the other night, these people face a

pretty bleak and uncertain future. Mr. Speaker, we see no indication and I am

not at all comforted, and I am sure the people of Menihek are not comforted by

the Minister of Mines and Energy who set up an advisory board to look at the

mining industry, who says that the Province might assist in some mobility. Mr.

Speaker, that is not good enough. The people who have contributed so much to the

economy of this Province deserve better. If we look at the history of the towns

in this Province, the one industry towns, we have to look no further than across

from Portugal Cove to Bell Island. The town of Bell Island for a number of years

was a town that at one time had some 14,000 or 15,000 people which shrank to

6,500, the economy was decimated. The mines closed down and there was nothing

for the miners. Added to that, Mr. Speaker, of course this was at a times when

labour legislation and unions were not very powerful; a pitiful pension. We just

saw in Wabush last night the union massively rejecting a proposal by the company

to come up with some settlement for people who had a number of years experience

and basically the company is in such dire straits that it has to do something to

protect itself.

What it is doing is laying off employees, sending them

throughout the Province and someone has to step in; someone has to take an

initiative and in this case the only one who could do it is the Government; but

what concerns me about this, Mr. Speaker, was the attitude of the Premier, the

other day.

The Premier was quite adamant that he is not a metallurgist

or he is nothing else and there is nothing he can do for the mining industry,

and what seems to have occurred here is that, Government has thrown its hands up

in despair and said there is nothing we can do. The Minister of Mines and Energy

said: I am not sure whether it would be a good thing or not.

Well, Mr. Speaker, we would really like clarification on what

the Minister of Mines and Energy meant when he said he is not sure if this would

be a good thing or not. Anything that could help the people of a town like

Labrador City and Wabush or Baie Verte, that have had their sole source of

income taken from them - we have to wonder as to what the Minister of Mines and

Energy was referring to when he was saying that he is not sure whether it would

be a good thing or not.

Everyone I guess can recall quite vividly when Alberta went

through its boom years, it set aside millions, in fact billions of dollars in

its heritage fund for a time when the oil would be no more. Well they have not

reached that stage there yet; there has been a downturn in that industry and the

people there had something on which to rely on and it came from this fund. We

realize that the amount of money in the payroll tax is not great; it is not a

great significant amount for the mining industry in Labrador, but what we need

is a recognition of a Government that people are important, that there is some

concern and some consideration for the people who have contributed so much to

the economy of this Province in the last, I guess, thirty years, maybe longer

than that -

AN HON. MEMBER: Buchans was fifty years (inaudible).

MR. WINSOR: - yes, Buchans was fifty years. Mr. Speaker,

I did spend some time, as my colleague for Menihek said, and most of us have

spent some time in Menihek. I did have a summer in 1973, when I worked in the

mines in Labrador City, in the mill while I was a student at University and did

quite well. I made a lot of money that summer in comparison to what I would have

made elsewhere, so it seems I guess, it is a bit misleading of Government and a

bit devious for them to say that they cannot do anything about it because we

cannot have, as the Minister said, one thing for one resource, one thing for

another one, but what we are dealing with here, Mr. Speaker, is nonrenewable

resources and as my colleague said, the minute the first gallon of oil is pumped

from Hibernia, it is the beginning of the end and so we have to do something to

address it.

My colleague from St. John's East said that we, when we were

in Government, did not do anything about it. Mr. Speaker, that is history, that

is a thing of the past and what we have to do is to plan and prepare for the

future and this is not being done. In fact, what we see happening because of

this Government's attitude, it is happening actually in the reverse. In a time

when mining industries are becoming increasingly competitive and as the Minister

of Mines and Energy said, there is lots of iron ore out in Conception Bay, in

fact the Bay is full of it, but it was not economically feasible.

All the payroll tax is doing now is making it less feasible

for the mines to stay in operation and at the same time it takes away any

potential they have through its diversification fund to do something down the

road in the future. There is no question, Mr, Speaker, that in twenty, thirty,

forty, fifty years time, there will be more changes in the mining industry, but

as a Province, we have to do something to prepare for it.

Looking at reports published back in 1975 or 1976, it is cold

comfort, it does not do very much to help the mining industry of Labrador, the

miners, their families who, tomorrow morning or next week or next year, have

nowhere to go and no job retraining. This is what this fund could entail, so

that people of one-industry towns would, when their industries shut down, as

happened in Buchans, in Daniel's Harbour, on Bell Island, and many of the

numerous mining towns in this Province, have someone come to their assistance.

Mr. Speaker, it was not so long ago that Kruger, the giant in

the paper industry, experienced - well, it was Bowater at the time, and the

Government came to the assistance of the forestry industry, and rightly so. In

this case, Mr. Speaker, it was a renewable resource. Trees will grow again

tomorrow and next week and next year. Once these mines have been depleted, they

are gone forever, and the onus is now on this Administration, this Government,

to put in place now some plans to deal with the displacement that will come to

these people.

So, Mr. Speaker, I have no difficulty in supporting this

resolution, that the revenues from the payroll tax be set aside for a special

fund called the diversification fund to come to the assistance of persons

affected by the economic dislocation in the mining industry. I hope that the

other speakers on that side - the Minister of Forestry seemed to indicate that

he was very supportive of the resolution, and I hope that in a minute or so when

he speaks he will rise and support it. The Minister of Forestry said that this

proposal had been put forth some time ago, is very supportive of it, and we are

hoping that the Minister will rise in his place and support the resolution. We

hope next week, when Cabinet meets, the Minister of Mines will have a leading,

strong voice from the Member who represents a former mining town, the Town of

Buchans, that the Minister will speak quite strongly and clearly in defence of

the mining industry.

Mr. Speaker, I am sure the Member for Baie Verte - White Bay

too will speak quite eloquently in caucus on the need for a diversification in

the mining industry, as might -

MR. SIMMS: Perhaps in Cabinet as the Minister of Justice.

MR. WINSOR: Perhaps he could be in Cabinet as the new

Minister. I am sure the Member for Mount Scio - Bell Island, who too has had a

town, or the Minister of Development, the Member for St. Barbe who has had a

mining town that lost its major resource, that these people will speak on the

resolution put forth, support the resolution put forth by the -

MR. FUREY: Ask for a depletion or whatever and you will

get it.

MR. SIMMS: We just covered that. That is history now.

MR. WINSOR: Now is the time to look to the future. So, if

the Minister of Development wanted a mining depletion resource then, he should

want one now. The Minister has got a chance -

AN HON. MEMBER: He depleted the whole thing.

MR. SIMMS: It is rather miniscule now, $2 million.

MR. WINSOR: Mr. Speaker, if the Minister of Development

is going to speak in favour of this resolution, then I will certainly defer to

him and, in so doing, hope that he can convince some of his colleagues in

Cabinet, that, by the way, is becoming less and less every day. We only have to

have three or four in Cabinet to support this resolution, and I suspect that

this resolution could very well carry with the dwindling numbers that are

appearing in that Cabinet circle, with only four or five in the front bench now.

We do not know who is next because each day brings a new surprise, but we could

have enough people in Cabinet to support this resolution. The policy of this

Administration in the weeks to come will be the immediate implementation of a

mining depletion tax to cover the affected areas.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Before I recognize the hon. the Member for

Baie Verte - White Bay, I would like, on behalf of hon. members, to welcome to

the House this afternoon twenty Grade XII students and their two teachers, Fred

Melendy and Peter Gibbons, and the bus driver, Ernest Stagg from the Lumsden

School Complex, Lumsden.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: From that great historic District of Fogo.

Now I will introduce the hon. the Member for Baie Verte -

White Bay.

SOME HON. MEMBERS: Hear, hear!

MR. SMALL: Thank you very much, Mr. Speaker. This being

my first speech in the House I would like, on behalf of my brother Mark, to

bring congratulations to Mr. Simms on his being chosen as the Leader of the

Party and becoming Leader of the Opposition.

SOME HON. MEMBERS: Hear, hear!

MR. SMALL: I am sure his dedication to politics and this

House will be greatly appreciated in the coming days.

Now I stutter a bit but you will have to overlook that. I

feel I am honoured today to be able to stand in this House on behalf of the

people of my district, Baie Verte - White Bay. It gives me a gratitude to know

that they have elected me to represent them in this House of Assembly. I must

say it is a whole new challenge for me. It is a lot different from getting up in

the middle of the night, untying the boat and going out fishing. But I am sure

it brings a greater responsibility to those that elect you and also to our

Province on the whole.

Mr. Speaker, I realise that being an MHA in these times is a

very difficult job with the economic situation that we have in Canada and in

Newfoundland. With all the cutbacks coming down from our Federal Government,

Ottawa leaves our Newfoundland Government with no other option but to cut back

on health care and education. Our Province has been devastated in the last few

years because of the recession in Canada and other parts of the world. Our

mining industries have all but shut down, and it is partly because of new

technology. Our Government has given large sums of money to our mining industry,

our paper mills, our logging industry. They are bringing in new technology and

they are employing fewer and fewer people. And we have governments that fail to

bring in new jobs to keep up with the jobs that are being taken away by new

technology. The fishing industry has changed. We install newer equipment every

day. We are building bigger boats and we need fewer men. We install equipment in

our plants and we are taking away the jobs. Having said this I would like to

come back to the motion on the floor regarding the tax.

Our mining industry I think has had lots of help from

governments in the past. I know the Baie Verte mines received large sums of

money, but I have my observations on those large sums of money, whether they

were used in the right way. The mine was kept open for a very long time. Finally

she had to shut down. I think that money could have been used to build new

industries so that when the mine did shut down we had jobs, and we did not have

to come out with special funds to look after our people. I think this is what we

should have been doing down in Labrador West. We should be creating new jobs so

when the mines do shut down we have some jobs for our people.

Over the last few years we have seen drastic cuts in transfer

payments from our Federal Government in health care and education. The Federal

Government is responsible for the destruction of our fish stocks. You might say

this is irrelevant to what we are speaking about.

When Newfoundland came into Canada we brought in large

wealth, we brought in the largest and best fishing grounds in the world, we

brought with us one of the greatest hydro potentials in the world, we brought

with us the great iron ore deposits of Labrador, we brought with us the great

oil fields off our coast, and we have nothing to be ashamed of. But today we

only have 575,000 people and we cannot even feed ourselves. There must be

something wrong. Maybe you could talk about our past government also.

SOME HON. MEMBERS: Hear, hear!

MR. SMALL: They had a large role to play in it all. What

I see has happened to our fish stocks over my few years that I have been in the

world, our fish stocks have been taken away and they have been traded off to

foreign nations so they could buy wheat from Alberta and cars from Ontario. To

my recollection today the foreign nations are taking more ground fish off our

coast than the whole of Canada has taken, and not one cent of taxes collected on

any of that fish, only a licence fee.

Mr. Speaker, I think the mining industry receives help from

our Government in the way of job training and other assistance. I think if we

have to create a special fund for every industry in Newfoundland we will have

more funds than we know how to look after. We need our payroll tax because all

the money is cut back from Ottawa. We had no other way to find some money to

look after our people, and what I say today if we have to set up a special fund

for the fishermen, one for the mining and one for the woods and one for the

schools, life is only a gamble. We go on and go to work, we lose our jobs. Today

we have to go onto other things. We need a general fund that can look after

everything in a general way.

Mr. Speaker, before I finish I want to go back to my own

district again for a while. The previous Tory government put large sums of money

into the Baie Verte mines, but they failed to give the people in my district the

basic needs of life, the basic necessities. We still have sixteen places in my

district hooked up to dirt roads, and many other communities that still do not

have good drinking water and no sewer facilities. This is unacceptable in this

day. What the majority of Newfoundlanders take for granted, people in my

district think is a luxury. They think it is a luxury to have a drop of good

water to drink and a bit of paved road. Now I do not expect miracles overnight

after sixteen years of the PC government not being able to do it, but I do need

a fair share. We need better facilities for fishermen, we need to renovate our

health care system, we need our roads paved, we need water and sewer, and keep

our education system upgraded, and we need some money to go into exploration

work, the mining.

The mining industry is all but gone in Newfoundland because

of the recessions in Canada and other parts of the world. We need to do some

exploration work so we can have our mines ready to go when things pick up. We

have to work to bring new industries into Newfoundland, something that will

bring new dollars to our people and new tax dollars to our Government. Let us

all work together for the betterment of everyone in Newfoundland. Let us work

together, both on the Opposition side and on this side. I think we have no time

for games and play in Newfoundland today. We have to do some creative work.

Thank you, very much.

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Thank you, Mr. Speaker.

I am only going to speak for a few moments to the resolution.

I had not intended originally to speak but having heard some of the comments

from members opposite, in particular, but most importantly having heard the

introductory speech by my colleague, the Member for Menihek, I was spurred on to

get up and participate in the debate. Because I think the Member for Menihek

gave one of the finest, most passionate speeches in this House, here this

afternoon. I mean that sincerely, he did. What I know about the Member for

Menihek is that he was speaking from the heart. Let me assure you, he was not -

and I want to specifically direct this comment to the member who just sat down,

the member who just gave his maiden speech in the House: let me assure him that

the Member for Menihek, when he presented this resolution today and in his

introductory speech, was speaking from the heart. Let me assure you, he was

speaking for the people of his constituency, and he did a darn fine job of it,

as far as I am concerned.

Mr. Speaker, it was because of the speech by the Member for

Menihek and because of the remarks of members opposite that I felt I should say

a few words. Let me just in passing refer to the Member for Baie Verte - White

Bay. I only want to do it in passing, because the longer he sits here, the more

he will realize that the rules apply to all of us equally. The one exception is

when a member is giving his maiden speech. That is an occasion when members

opposite, whatever the opposite side might be, will try their best not to

interrupt, or call a member to relevance. The resolution here, of course, was a

very specific resolution, and the member did move off into other areas. That was

fine; we did not oppose or argue that and the Speaker did not interject. But, as

he sits here during the next year, or year-and-a-half - that will be the time he

will have, maybe - during that period of time, he will realize the rules.

MR. HOGAN: (Inaudible).

MR. SIMMS: I am commenting on the member's maiden speech.

May I also say, Mr. Speaker, if the Member for Placentia, the

Minister of Social Services, would stop interjecting and show a little decorum,

I would also like to commend the Member for Baie Verte - White Bay on his maid

speech in the House. He did a marvellous job, as far I am concerned. He touched

on points of concern to him and I know they are points of concern to his

constituents. I know he spoke, as well, from the heart and I commend him on his

maiden speech.

Mr. Speaker, to get to the resolution, there are only a

couple of points I want to make, and one of those points is this: While the

debate was going on, members on this side spoke, and members on that side

interjected and talked about the past. The Member for St. Barbe and the Member

for Windsor - Buchans both made reference to the fact that when they were facing

similar situations in their constituencies, they themselves, and their

constituents, community groups in those areas they represented, asked for

depletion funds or something similar to aid the people from those areas.

AN HON. MEMBER: (Inaudible).

MR. SIMMS: You see what transpires, Mr. Speaker. When you

are trying to make a speech, as soon as you make a point, they immediately try

to detract from the point you are trying to make and they want to attack,

instead of getting up on their feet and participating in the debate, which they

are entitled to do at the appropriate time. Now, they did not do it. So I would

like to make my observations, Mr. Speaker. It is obvious the Premier and the

Government House Leader are gone, because they are coming at us now like flies.

In the few moments I have remaining, I would like to make my comments without

interference from members opposite, if I might be so permitted. Mr. Speaker,

members opposite said they looked for something similar during times of crisis

in their own areas.

Other members during the debate, have made the point that

nothing happened when you were the government. You didn't do this, or you didn't

do that. Mr. Speaker, I think the Member for Baie Verte hit the nail on the head

- I think he was dead on, and I support him in what he said right at the end of

his speech, I don't know who was listening, but I was - when he said that what

happened in the past can be attributed and blamed to all governments; ours, the

previous Liberal government for twenty-three years, or whatever, and he is

absolutely correct. What has happened in the past is history. Those who want to

live in the past, fine, but I intend to live in the future, because that is

where I am going to be spending the rest of my life.

I agree with the Member for Baie Verte - White Bay, when he

says it is time to put away the games, time to stop playing politics, and time

to address the issues of the day. And that group over there on that side of the

legislature, Mr. Speaker, has been elected to form the Government. They are the

Government. They cannot respond to all of the suggestions and all of the

requests by simply saying, Well, the crowd before us didn't do anything. You may

as well go back to twenty-three years of Liberal rule. Why were the roads in

Baie Verte not paved by Mr. Smallwood and his government for twenty-three years?

What is the point, Mr. Speaker - and I think this is the point that the Member

for Baie Verte - White Bay was trying to make - what is the point of going back

over all of that old history? We can do it, you can do it on that side, but we

don't get any further ahead.

The issue that has been introduced here today is an issue

that has been introduced by the Member for Menihek in a sincere fashion. He is

trying to get some help for those hundreds and hundreds of people from Labrador

West who are now faced with a very difficult situation, an extremely difficult

situation. There are some 500 employees, I think is the number, early in the new

year, who will be faced with job loss. With their spouses and their families, I

suppose it is going to affect 2,000 people. It is going to affect 2,000 people.

Now what do the 2,000 people in Menihek have to look forward to? Many of them, I

guess, have mortgages on houses that now have certainly devalued, no question

about that. They have payments on their vehicles to worry about. People have

been selling their vehicles, my colleague tells me, over the last little while.

They have been forced to sell off their vehicles. They have children going to

university. They are people, for the most part, who have been making good money,

with very well-paying, high-paying jobs, and now, 2,000 people are going to be

forced to make some other decision. I suspect a fair number of those people will

probably decide to leave the area. From what I hear, and from what I see - well,

500 jobs are going to be affected. Let us assume that most of the workers have

spouses, that will make 1,000. If they have a child or two each, you are looking

at a couple of thousand people from the area. That is a large, large number of

people to be affected in such a negative way.

Now, Mr. Speaker, I do not think my colleague, the Member for

Menihek is necessarily saying, give me or my constituents special treatment. He

is not suggesting that only for his area, that it is the only place this would

apply, it would apply elsewhere in the Province. And he made it clear in his

remarks, if anybody listened to his speech, that he is also talking about

non-renewable industries, which would include offshore oil. I checked with the

Minister of Mines and Energy, and there is no provision or anything for any kind

of a depletion fund to assist workers fifteen or twenty years from now when

those resources are depleted. There is nothing there, and if there had been, in

hindsight, it would be helpful to the people who are going to be finished work

there in fifteen or twenty years time.

Now, Mr. Speaker, I also want to mention one other point that

my colleague, the Member for Menihek, tried to make during his presentation in

this legislature. He tried to make the point that these people are not looking

for a special favour. In response to his sincere request, the Minister of

Finance's initial comments were: `looking for special treatment.' That wasn't

his point at all. His point is that we need and should have some kind of

mechanism in place, whether it is the payroll tax - I am not quite sure, as my

colleague pointed out earlier, not everybody agrees with taking the payroll tax.

I do not agree with the payroll tax.

But, if it is a minuscule amount, which was $2.7 million, I

think the Premier said, is what comes in from the mining industry. And the

Premier made reference to the fact when he was asked a question in Question

Period that that is a very small amount, a minuscule amount. The point my friend

was trying to make is that if it such a minuscule amount, then why don't you

start a fund? Why don't you take that money? Because that is the only industry

that has the payroll tax -

AN HON. MEMBER: The only resource-based industry.

MR. SIMMS: - the only resource-based industry that has

the payroll tax applied to it - the mining industry. All the others were exempt.

Forestry, fishery, were exempt from paying the payroll tax. That is his only

point. But the underlying point of the Member for Menihek is a plea, crying out,

I guess, on behalf of the people whom he represents, and I suspect, will

continue to represent for some time yet to come. He is a member who is in his

constituency every week. He is a member who goes out to the shopping malls, down

around the high schools, walks the streets downtown in Wabush and Labrador City

and talks to the people.

MR. GRIMES: He hasn't been in Wabush for two years, they

told me when I was up there last week.

MR. SIMMS: Well, I doubt very much if the Member for

Exploits would be an expert on that, because he has not been in Exploits for two

years, from what I understand. But that is another issue and we can debate that

another day.

My point is, the Member for Menihek is speaking in this

legislature today as he did two or three days ago in Question Period when he

asked the same kinds of questions. He is speaking on behalf of the people who